Warning Amid Market Fluctuations: The Importance of Risk Control Evidenced by Majie Big Brother’s High-Leverage Liquidation

“Current Position: Long 2,200 ETH at 25x leverage (approximately $6.67 million); liquidation price: $2,991.43; cumulative profit and loss: a loss of $24.18 million.” This is the latest status of Huang Licheng (Brother Magji) address monitored by Lookonchain on January 20, 2026. Due to market decline, his long position was liquidated 5 times again on that day, with total losses rapidly increasing.

Position Evolution: From Partial Liquidation to Chain Liquidations

Just a few days ago, on-chain data showed that this well-known crypto asset holder managed his positions cautiously. According to the monitoring on January 18, Huang Licheng closed out 2,450 ETH longs in multiple batches, realizing a profit of $301,000. After the operation, his account still held an open position of 8,800 ETH, with an average entry cost of $3,145. At that time, this position had an unrealized profit of $1.597 million, with a total position value of $29.27 million.

However, market changes far exceeded expectations. On January 19, the situation started to worsen. His 25x leveraged ETH long position was partially liquidated, and the account had already fallen into a loss state, with floating losses exceeding $1 million, and total unrealized losses reaching $23.6 million.

By January 20, his ETH long position’s floating loss had expanded to over $660,000, with a liquidation price of $3,019.84. Ultimately, under continued downward market pressure, there were 5 consecutive liquidation events on that day, further expanding the total loss to $24.18 million.

Market Background: Crypto Market Under Pressure

Huang Licheng’s liquidation event was not isolated but occurred amid a broader global risk asset adjustment. On the morning of January 21, 2026, the cryptocurrency market declined across the board. Ethereum’s price dropped as much as 6.94% within 24 hours, Bitcoin fell 4.66%, BNB and Solana declined 5.35% and 4.90%, respectively. The overall market decline led to a total of $1.064 billion in crypto contract liquidations within the past 24 hours.

Global markets were also grim. The three major US stock indices all declined: Dow Jones down 1.76%, S&P 500 down 2.06%, Nasdaq down 2.39%. Major European indices also fell collectively, with FTSE 100 down 0.67%, CAC 40 down 0.61%, DAX down over 1%. In this environment of systemic risk release, high leverage positions faced sharply increased pressure, explaining why many traders experienced liquidations during this period.

Hedging Choices: Capital Flows into Traditional Assets

Contrasting sharply with the crypto market decline, traditional safe-haven assets performed strongly during the same period. Geopolitical crises intensified, boosting market risk aversion, and gold futures prices continued to rise on January 20, reaching new all-time highs. This trend was also evident in digital assets.

On-chain gold tokens became a market highlight. According to Gate data, as of January 21, PAX Gold (PAXG) was priced at $4,864.54, up 3.86% in 24 hours; Tether Gold (XAUt) was priced at $4,836.33, up 3.55%. The rise of these digital gold tokens was directly driven by the spot gold price breaking through the $4,700 historical high. Data shows that a whale bought 8,337 XAUt over the past 20 days, worth $38.4 million, indicating institutional investors are continuing to increase their holdings in these safe-haven assets.

The negative correlation between gold assets and risk assets is especially pronounced in the current market environment, which also explains why some funds are flowing from crypto markets into traditional safe-haven assets.

Leverage Strategies: High Returns with High Risks

Huang Licheng’s trading strategy has long been known for high leverage in the crypto community. Looking back at August 2025, he had increased his long positions to 21,900 ETH (25x leverage) and 50 BTC (40x leverage), with estimated values of about $100 million and $5.9 million, respectively.

High leverage trading is a double-edged sword. When the market moves in the expected direction, it can significantly amplify gains; but in the opposite direction, it can quickly magnify losses and trigger forced liquidations.

From Huang Licheng’s trading history, this is not his first time adjusting positions due to market volatility. In October 2025, he liquidated and sold 1.64 million PNKSTR, incurring a total loss of $214,000 (-65%), then shifted funds into increasing ETH long exposure. Once again, he chose high leverage to go long ETH, but the market moved against his expectations. As ETH’s price continued to decline, his positions were repeatedly partially liquidated, leading to ongoing losses.

Table: Recent ETH Position Changes and Market Performance Comparison

Data Analysis: Price Trends on Gate Platform

On the Gate platform, precious metals and cryptocurrencies show contrasting trends. As of January 21, 2026, XAUT was priced at $4,836.33, up 3.55% in 24 hours; PAXG was at $4,864.54, up 3.86%.

Meanwhile, the overall crypto market remains under pressure. According to Gate analysts’ forecast, the 2026 gold price range may be between $3,900 and $5,800, with an average estimated price of $5,100. For Ethereum, considering recent performance and market conditions, traders should pay close attention to key price levels. Huang Licheng’s liquidation price was $2,991.43, and his average entry cost was about $3,145—these two levels could become short-term technical reference points.

Increased market volatility makes setting reasonable stop-loss orders and strictly controlling position sizes especially important. When trading on the Gate platform, traders can adjust leverage flexibly based on their risk tolerance and market judgment to avoid forced liquidations caused by sharp market swings.

Risk Lessons: Survival Rules in Leverage Trading

Huang Licheng’s case provides an important risk warning for all leverage traders. During extreme market volatility, the risk of liquidation for high-leverage positions increases sharply.

Professional traders generally recommend that single-trade risk exposure should not exceed 1-2% of total account funds. This way, even if experiencing consecutive losses, there is still sufficient capital to continue trading. On the Gate platform, traders can use isolated margin mode to segregate risks of different positions, preventing losses in one position from affecting the entire account.

Diversification is also an effective way to reduce risk. In times of increasing market uncertainty, consider not only diversifying among different cryptocurrencies but also focusing on tokenized traditional safe assets, such as gold-backed tokens like XAUt and PAXG, which tend to have low or negative correlation with crypto markets.

Monitoring on-chain data can also provide valuable insights. Movements of large holder addresses, exchange fund flows, and leverage ratio changes can help traders better understand market sentiment and potential risk points.

As the market continues to fluctuate, Huang Licheng’s holdings have decreased from a high of 8,800 ETH to the current 2,200 ETH. He has placed a stop-profit order for 400 ETH at the $3,350–$3,400 range, which now seems out of reach. The crypto world will always remember scenes like this: when Ethereum’s price briefly touched $2,991.43, on-chain alerts for liquidation sounded again. This is not just a change in account figures but a market warning to all participants.